Car Tech Startup Investment Exceeds $1 Billion In 2016

Doug Newcomb
, ContributorDriving the conversation on the connected car and mobilityOpinions expressed by Forbes Contributors are their own.

Image by CB Insights.

If you want an indication of how hot the car tech market has become, just follow the money. In this case, the more than $1 billion invested in the space in 2016 – a 30% rise in deal activity over the previous year, according to CB Insights. The business data analytics company recently reported that a record high of $1,049 million was invested across 87 automotive technology deals in 2016, representing a 91% rise in funding over the previous year.

“Hype around the broader mobility themes of automation, connectivity, electrification, and sharing has drawn a rush of investors to startups working in these spaces.” noted CB Insights, adding that EV robo-taxi developer Zoox “holds the crown for the largest deal of 2016,” with $200 million in financing from investors in June and another $50 million in October, according to an SEC filing.

CB Insights also cited Zoox as “one of two auto tech unicorns born in 2016.” The other was Quanergy, which develops solid-state lidar sensors essential to self-driving technology. A rise in funding levels for car technology startups was also attributed to the proliferation of aftermarket connected car “dongles” and per-mile insurance providers such as Metromile, which received a series of significant funding in September.

Another area that grew in 2016 was startups that leverage smartphones to provide driver safety and assistance. Nexar, which is developing a smartphone-based, AI-enhanced dashcam app, and Pearl Automation, maker of a backup camera that connects to a driver's smartphone via Wi-Fi, both raised cash in June.

CB Insights noted that the U.S. “remains a central force with 68% of all deals.” Canada is second by country in deal share and is host to startups like lidar developer LeddarTech, computer vision company Algocian and connected car provider Mojio. Israel is third and home base to dominant automotive camera-maker Mobileye as well as other sensor companies such as Oryx Vision and automotive cybersecurity startup Argus.